Estonia is better prepared for a possible global economic crisis than it was in 2008, while it would be easier to go into the crisis with a fiscal surplus, former governor of the Bank of Estonia Ardo Hansson says.
According to Hansson, Estonia has had a strong starting position reflected in its 4 percent growth, but also low unemployment and considerable salary pressure.
"The Estonian economy was utterly unbalanced in 2008, while we can see signs of moderate overheating today. A soft slowdown will be tolerable," Hansson said of the situation today.
He said that while individual companies might have a very difficult time due to complications caused by the spread of the novel coronavirus, most sectors of the economy should not feel the shock.
"But it is a different crisis or shock, one originating in the medical sector and not banks."
Hansson also said Estonia should be ready for a situation where an economic crisis caused by the virus lasts longer than just a few quarters.
The former central bank governor described as welcome the government task force to analyze the virus' effect on the economy and work out measures for tackling a potential economic crisis.
"Because we have maintained responsible fiscal policy over the years, we know that we have at least some buffers that some other countries might not have," Hansson said.
Editor: Marcus Turovski